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Polish restructuring law – key features & view from a year perspective

From the 1 January in Poland we have to separated legal Acts focusing separately on Restructuring and Insolvency procedures. There is no doubt that is new opening for polish companies. Because until the end of 2015 from the practical perspective there were only insolvency regulations and the was no effective legal procedure to restructure enterprises. Of course until the end of 2015 we had a recovery procedure, but it was inefficient in consequence in the end we always had a insolvency.

Now, one hand we have insolvency legal Act – Ustawa prawo upadłościowe and on the other hand we can restructure company using – Ustawa prawo restrukturyzacyjne, which is legal Act dedicated only to restructuring procedures.

Tools – most important is what we as restructuring advisors, company managers and last but not least Investors really get from those rules?

Insolvency Act, to make it simple it regulates whole insolvency procedure and it’s focusing on this matter, but there is one important tool we get. “Pre-pack” gives opportunity to debtors and potential investor to arrange deal before insolvency will came.

Pre-pack process:

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The restructuring perspective is wider and gives us four ways to take care od company which already close to bankruptcy:

Procedure for approval of a plan after creditors votes

  1. Fast-track restructuring proceedings
  2. Ordinary restructuring proceedings
  3. Sanation proceedings

In this order those procedures are from less formal (1) to most strict (4). But in general after almost a year is there any difference for companies and investors? Are hose regulations in practical use and popular?

Yes, they are and the scale is growing. It’s probably just a beginning for investment opportunities for investors who want to make a deal on companies during the restructuring proceedings.

Just a simple comparison, in 2015 in Poland we had 750 opened insolvency proceedings. From 1 January until 31 October 2016 the proportions are 514 opened insolvency proceedings vs 155 opened restructuring proceedings. Those number shows that opportunities on Polish restructuring market should be very promising.

Our advice to investors is to take care of proper advisor and to look for investment occasions.